For residents of North Carolina who are considering the purchase of a life insurance policy, we have assembled useful information regarding your rights as a policy owner. We wouldn’t expect you to parse through long legal documents, so we have highlighted the most pertinent information for you that is sure to come in handy.
North Carolina Life Insurance Rules And Regulations
Life insurance in North Carolina is regulated under chapter 58 of the state statutes. Chapter 58 explains your rights as a policy holder, the extent that insurance companies are liable for claims, and standard business practices for all life insurance companies to follow.
North Carolina residents are entitled to a 10 day period where they may return the policy after it has been received for a full refund. This period of time is known as a free look, and the length of time may vary from state to state, and it may even vary depending on your insurance policy. The purpose of the free look is to provide policy holders with enough time to read over their life insurance contracts carefully and consider if the insurance is exactly as they expected it to be.
The Grace period in North Carolina is a minimum of 30 days. Some companies may provide 31 or even more days, but all must provide 30. The grace period begins when a missed premium payment is due. During the grace period, the insurance policy can not lapse, and the insured person is fully covered in case of death. The payer (usually the owner) of the policy has the full grace period length of time to make up for the missed premium payment, and restore the policy to good standing with the insurance company. The grace period prevents a policy from lapsing when payments are slightly late, which helps to prevent the need for new underwriting for the insured (which they might need for a new policy, or to reinstate a lapsed policy).
Guarantee Of Payments And Cash Surrender Value
The state of North Carolina, through the North Carolina Life and Health Insurance Guaranty Association, guarantees that if an insurance provider goes bankrupt or is otherwise unable to make payments, the death payments will be guaranteed up to $300,000 per person. They will also guarantee cash surrender value up to the amount of $100,000 per person. These limits are placed regardless of how large a policy may be, or how many policies are outstanding. While the maximum guarantees are not enormous, they do provide peace of mind to owners and beneficiaries of life insurance. Because payouts may be slow from the guarantee funds, and because the limits for coverage are low, we at Life Ant always recommend that you only purchase life insurance from financially sound companies.
North Carolina Life & Health Insurance Guaranty Association Can Be Reached At:
PO Box 10218
Raleigh, NC 27605-0218
Timely Payment of Claims
If a death claim in North Carolina is not paid within 30 days, the claim begins to accrue interest owed to the beneficiaries. North Carolina has this rule in place to encourage claims to be paid quickly, and it works. Most claims in North Carolina are settled within about a month.
Readability Of Insurance Policy
North Carolina does not believe that residents should be tricked by confusing financial jargon, so they require that all policies be readable. This mean that the word choice must be widely understood by all, and stated plainly.
North Carolina Department of Insurance